• by Colin Kirkland , December 27, 2023

On January 29, Amazon will launch limited advertisements on Prime Video movies and TV shows in order “to continue investing in compelling content and keep increasing that investment over a long period of time,” the company said in an email it sent to customers.

To avoid seeing ads while streaming, Prime subscribers now have the option to pay an additional three dollars per month.

Amazon first announced that it would be incorporating ads into its content offerings in September, starting in the U.S., the U.K., Germany and Canada. Customers in other regions will have until late next year to decide whether they will pay extra for an ad-free Prime Video experience.

“We aim to have meaningfully fewer ads than linear TV and other streaming TV providers,” the company added in its email, following through with its September announcement. However, aside from Amazon withholding ads from rented and purchased content, it is still yet to be determined how much ad-time it will allow on Prime Video.

With these changes, Amazon Prime Video -- which currently costs $8.99 per month -- will end up being priced at under $12 for an ad-free experience, while a full Prime membership, which costs $14.99 per month, will rise to just under $18.

In addition to paying for emerging content, as the company described in its email, it is also attempting to compete with other leading streaming services such as Disney Plus, Hulu, Netflix, Max, and Paramount Plus, all of which have raised their prices while including ads on their cheapest subscription tiers.

By monetizing ads on Prime Video, Amazon is also growing its budding advertising business.

With the recent extension of Sponsored Product ads to properties off Amazon and these new streaming-based ads, some analysts believe the company is on a promising trajectory for a notable increase in ad-revenue, which grew over 23% in 2022, and now accounts for about 8% of the company’s total revenue.

“We think Amazon’s proposition to advertisers is compelling with a large streaming audience, industry-leading data insights, and a broad spectrum of offerings to capture spending from SMBs and enterprises both on and off Amazon properties,” Wedbush’s Scott Devitt recently told MediaPost.